Authority Shall Be Liable Work Personally †Myassignmenthelp.Com

Question: Discuss About The Authority Shall Be Liable Work Personally? Answer: Introducation A company is incorporated by its founders and lawfully it has a separate legal entity from its members. In the eyes of law, an organisation is artificial being and has certain rights are duties. According to Ferran (2011), the board of directors can be determined as corporations directing mind and will. The board of directors acquires their power from the management of agency between them and corporation. If a proper authority to take action for the interest of the organisation has delegated by directors to an employee, then such employee can be determined as mind and will. The authority or power delegated must be expressed or implied by the directors. The employee performing any work outside their power or authority shall be liable for such work personally. In the case of Aderemi v Lan and Baker Nigeria Ltd (2000)7 NWLR Pt. 663 at 51, the senior members who acquired their authority to act from the board of directors and performed some work for organisational benefits, determined as directing mind and will. In the recent case of Sugarloaf Hill Nominees Pty Ltd v Rewards Projects Ltd (2011) WASC, the investors assets lost in the project of an organisation, and they face significant monetary injury; the judgement of the court held key managerial personnels of the firm liable for finance money (Wheelwright 2006). Piercing the Corporate Veil The shareholders of a company are considered as its owners but the identity of a company is different from its owners legally. The transaction and decisions of organisations are taken by its board and shareholders. But the shareholders or board cannot be considered as liable for the actions of an organisation; they are liable for the unpaid amount of their share. This shield or protection provided to the shareholders is known as a corporate veil. As per Vandekerckhove (2007), if a suit is filed against a corporation, the court can hold board or owners of such organisation liable for such acts by piercing the corporate veil. The court decides to ignore the separate legal entity of organisations and puts the liability of its actions on board or owners, it doctrine is called piercing of corporate veil. This doctrine disbarred the limited liability policy of the shareholders and held them liable for the acts conducted by them through the corporation. The doctrine of corporate veil is misused by board and shareholders, for example, they perform some illegal activity through the corporation and in case of determining liability for such acts, the board uses corporate veil as a shield. Therefore, the piercing of corporate veil policy is necessary to hold liable the real criminals as provided in the case of Prest v Petrodel Resources Ltd [2013] 2 AC 415. The court can pierce a corporate veil for many reasons such as fraud, illegal activity or loss of public money (McClain 2002). References Ferran, E., 2011. Corporate Attribution and the Directing Mind and Will. McClain, B.W., 2002. Piercing the Corporate Veil.Ohio Law.,16, p.14. Vandekerckhove, K., 2007. Piercing the corporate veil.Eur. Company L.,4, p.191. Wheelwright, K., 2006. Goodbye directing mind and will, hello Business law management failure: a brief critique of some new models of corporate criminal liability.Australian Journal of Corporate Law,19(3), pp.287-303.